2) A company had the following purchases and sales during its first year of operations: Purchases 10 units at $120 20 units at $125 15 units at $130 January: February May September: 12 units at $135 November: 10 units at $140 Sales 6 units 5 units 9 units 8 units 13 units On December 31, there were 26 units remaining in ending inventory. Using the Periodic LIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.) A) $3,405. B) $3,270. $3,200. D) $3,364. E) $5,400.

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…